SMM Evening Comments (Nov 6): Nonferrous metals on the SHFE closed mixed, while precious metals soared after the Fed left interest rates near zero

SHANGHAI, Nov 6 (SMM) – SHFE nonferrous metals ended mixed on Friday November 6, while precious metals jumped, with silver surging 4.36% and gold at one point hitting its highest in nearly four weeks, as the US Federal Reserve kept interest rates near zero, boosting investors’ appetite for precious metals, which are usually used as a hedge against inflation.   

Aluminium added 0.37%, zinc advanced 0.13% and tin rose 0.44%, while copper weakened 0.21%, lead fell 0.49% and nickel shed 0.51%.

Copper: The most-traded SHFE 2012 copper contract experienced fluctuations today. It ended 0.21% lower on the day at 51,430 yuan/mt, after hitting an intraday high of 51,570 yuan/mt earlier in the session.  

The US Federal Reserve kept interest rates unchanged between 0-0.25%, in line with market expectations. On the data front, US nonfarm productivity, which measures hourly output per worker, increased at a 4.9% annualized rate in the third quarter, lower than both the former of 10.6% and the expected of 5.6%. Meanwhile, US first-time filings for jobless benefits also missed expectations, falling by 7,000 to a seasonally adjusted 751,000 last week. These pressured copper futures. In the offshore market, the Chinese yuan broke above 6.61 against the US dollar to a new high since July 2018, which dragged down the US dollar index to around 92.5. Investors will continue to eye the US presidential election in the weekend.

Aluminium: The most-traded SHFE 2012 aluminium contract closed 0.37% higher on the day at 14,845 yuan/mt. Pressure above will be seen from the 15,000 yuan/mt mark tonight.

Zinc: The most-liquid SHFE 2012 zinc contract broke above the 20,000 yuan/mt mark to an intraday high of 20,035 yuan/mt in the afternoon trading, before paring some gains to finish the day 0.13% higher at 19,975 yuan/mt. It is likely to test the 20,000 yuan/mt mark tonight.

Lead: Opening at 14,400 yuan/mt, the most-active SHFE 2012 lead contract fluctuated mildly between 9:00 and 10:30, before dropping abruptly to an intraday low of 14,205 yuan/mt before 11 a.m., and after that, it regained some ground to finish the day 0.49% lower at 14,280 yuan/mt. Secondary lead smelters continued to trim output this week, but refined lead remained in oversupply and some smelters have restored production recently.

Tin: The most-active SHFE 2101 tin contract closed 0.44% firmer on the day at 146,740 yuan/mt, after hitting a two-week high at 147,080 yuan/mt earlier in the session. It is expected to move between 144,500-148,000 yuan/mt tonight.